Interviews
Pleasing week for broad Merinos
10 Oct '11
4 min read
The AWEX Regional Indicators finished 2.3% lower, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 1.7%.
As was the case last week, it is difficult to assess how much of the fall is attributable to global financial issues and how much is due to a real decline in demand, given the recent optimism about the outlook for wool in the short to medium term. Manufacturers are naturally cautious in times of economic uncertainty.
The EMI has fallen by 14.4% (22.8% in US currency) since the first two weeks of the season; and by 10.0% (18.2% in US) over the last four weeks. However, prices continue to remain well above the same time last year (see Table 3).
High pass-in rates were indicative of a reluctance of many growers to sell in the current market.
But, it was also another week when crossbred wools continued to be in good demand; and it was a satisfactory week for the broad Merinos.
42,836 bales were on offer, compared with 42,823 bales last week. 18.7% were passed in, comprised of 16.2% in Sydney, 19.4% in Melbourne and 20.7% in Fremantle. Pass-in rates for Merino fleece and skirtings were 21.1% and 21.3%, respectively.
34,813 bales were cleared to the trade.
The New Zealand Merino Company also offered 2,286 bales in Melbourne on Wednesday of which 55.1% were passed in.
The global financial circumstances and exchange rates were initially influenced by a large fall in the US share market on the previous Friday. The resulting loss of confidence and transfer of funds out of Australia led to a 3.1% fall in the US exchange rate.
Other factors during the week included ongoing concerns about Europe, indications of a further stimulus activity in the United States and speculation about whether the Reserve Bank in Australia will lower the official interest rate at its November meeting. There were some movements of 2¢ or more in the US exchange rate in both directions on Tuesday and Wednesday. The week finished on a more confident note which saw the share market and exchange rates lift.
It was a sale in two parts this week. The first part was an easing in the market on Tuesday and Wednesday, while the second was a more settled market on Thursday, with stronger competition, that resulted in a 2¢ lift in the EMI (13¢ in US currency) on the day. Thursday's market finished very strongly in Fremantle, with increases of 11¢ to 20¢ in the 18.0 to 19.5 micron Indicators.
Superfine wools from 16.5 to 17.5 microns were most affected this week, with sharp falls on first day of selling. The broader Merinos were the least affected and the finished the week well.
Prices for Skirting types also fell on the first days of selling in line with the changes in fleece types. Prices firmed, or gained in the stronger market on Thursday.
Crossbred types continued to do well, although the 28 micron average AWEX MPG was down by 1.3% for the week.
As was the case last week, it is difficult to assess how much of the fall is attributable to global financial issues and how much is due to a real decline in demand, given the recent optimism about the outlook for wool in the short to medium term. Manufacturers are naturally cautious in times of economic uncertainty.
The EMI has fallen by 14.4% (22.8% in US currency) since the first two weeks of the season; and by 10.0% (18.2% in US) over the last four weeks. However, prices continue to remain well above the same time last year (see Table 3).
High pass-in rates were indicative of a reluctance of many growers to sell in the current market.
But, it was also another week when crossbred wools continued to be in good demand; and it was a satisfactory week for the broad Merinos.
42,836 bales were on offer, compared with 42,823 bales last week. 18.7% were passed in, comprised of 16.2% in Sydney, 19.4% in Melbourne and 20.7% in Fremantle. Pass-in rates for Merino fleece and skirtings were 21.1% and 21.3%, respectively.
34,813 bales were cleared to the trade.
The New Zealand Merino Company also offered 2,286 bales in Melbourne on Wednesday of which 55.1% were passed in.
The global financial circumstances and exchange rates were initially influenced by a large fall in the US share market on the previous Friday. The resulting loss of confidence and transfer of funds out of Australia led to a 3.1% fall in the US exchange rate.
Other factors during the week included ongoing concerns about Europe, indications of a further stimulus activity in the United States and speculation about whether the Reserve Bank in Australia will lower the official interest rate at its November meeting. There were some movements of 2¢ or more in the US exchange rate in both directions on Tuesday and Wednesday. The week finished on a more confident note which saw the share market and exchange rates lift.
It was a sale in two parts this week. The first part was an easing in the market on Tuesday and Wednesday, while the second was a more settled market on Thursday, with stronger competition, that resulted in a 2¢ lift in the EMI (13¢ in US currency) on the day. Thursday's market finished very strongly in Fremantle, with increases of 11¢ to 20¢ in the 18.0 to 19.5 micron Indicators.
Superfine wools from 16.5 to 17.5 microns were most affected this week, with sharp falls on first day of selling. The broader Merinos were the least affected and the finished the week well.
Prices for Skirting types also fell on the first days of selling in line with the changes in fleece types. Prices firmed, or gained in the stronger market on Thursday.
Crossbred types continued to do well, although the 28 micron average AWEX MPG was down by 1.3% for the week.
Australian Wool Industries Secretariat
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